The “Mistake Wall”

Well over a long period of time we've generated good investment results but that doesn't mean we don't make mistakes. And one of the central tenets of our culture is to learn from our mistakes. And the reason is we're in a profession that's very different than football. We should be getting better with age. We have the opportunity to gain experience, and from experience comes better judgment, from judgment comes investment wisdom. So we try to learn from the mistakes.

And the way we do it is we frame the stock certificates of our biggest investment mistakes and we put a plaque on the bottom and that plaque has the transferrable lesson learned. Because the value of mistakes lies in the lessons you learn from them.

Now some of these mistakes are companies we bought where the value of the business ended up being lower than we thought. That's a classic investment mistake. But some of them were also companies that we should have bought but we never did. So we call these mistakes of omission. We want to learn from those, too.

We also want to study companies that we may have sold that we should have held. Often investors, if they look at their own portfolios, they'll realize sometimes their sells were some of their biggest mistakes. So we have this culture of trying to learn these lessons so that we can improve the process over time.

And one of the most satisfying things about doing this is often years later we'll look back at a particular mistake and we'll realize that we've actually earned a return on that mistake. Although we may have lost money with that investment, the lesson we learned led to improved results and then a better outcome in the long term.

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